Home > Services
About TPD Claims
Whilst TPD in principle is reasonably straight forward – an insurance policy which pays you when you can no longer work due to medical or health issues – in reality not all policies are the same. The underlying policy, the differences in the definitions and how the policy pays the benefit results in varied outcomes for the same condition.
There are 2 ways a TPD policy can be obtained:
1) Directly with the insurer where the insured person has applied for cover
In this case the insured person has applied for a policy directly with an insurer. The insurer would have likely underwritten the client and obtained all the necessary information needed before issuing a policy. The insured person would have had the opportunity (possibly with help from an adviser) to survey the policy landscape and select the policy which best suits them. These policies can have exclusions as an outcome of the underwriting.
The policy can be owned by the insured person OR their nominated superannuation fund.
The key features are the insurance company has underwritten the policy so both the insured person and the insurance company have certainty regarding the client, and the insured has selected a policy where they can know in advance the policy benefits and features.
2) Insurance provided as part of a superannuation policy
In this case it is normal for a person to enter into a superannuation find (normally as part of their work) and receive a predetermined amount of cover. A large number of people in Australia have TPD policies via this process, especially with industry funds. These TPD policies differ to where a person applies for a TPD policy directly.
The differences are namely:
• The insured has not selected the sum insured, so it may not suit their needs
• The sum insured may be changed by the trustee of the superannuation fund
• The sum insured may be a reducing benefit – as a person ages, the sum insured also decreases – and may not be supporting the person when they need the cover most
• The definition of what is a TPD is often more restrictive, which makes being successful in a claim harder.
• The definition of a TPD is often tiered, so that a claimant may not receive their full benefit. These policies may differentiate between an inability to work, and an inability to perform the ‘activities of daily living/work’ whereby if the claimant can still feed/wash/lift or walk they will not receive their full benefit payment
• The benefit payment may be staggered over a period (say 5 years) and the insured will need to satisfy the TPD definition on each period to continue to receive payments
When a TPD policy is owned within superannuation there are 4 parties involved (the insured, the insurance company, the super fund and the trustee of the superannuation fund). The more parties subject to a policy and the claim, the more complex the claim process is and the more timely a claim will become.
In summary, TPD policies are varied in how they are obtained and owned. This results in different outcomes for claimants. It is important to know what you have and understand how it affects you in the event of a claim.
TPD Claims FAQ’s
How long will a TPD claim take?
There are several factors which affect the time a TPD claim takes to complete
The period of disablement: A TPD policy will have a period for which the insured has to be not working. This is normally 3 or 6 months. Depending on the situation, some insurers will entertain a TPD claim in contemplation of the period being completed whilst others will not. This often depends on the condition the insured is enduring. A progressive disease like MND which is known to worsen over time is different to a stroke where a person could in fact return to work and make progress with their health
Prospects for recovery: As discussed above, some conditions have the ability to improve over time, whilst others do not. The insurer may seek advice from a treating doctor or independent medical expert to determine if there are prospects for improvement.
Access to information: The insurance company depending on the condition may require extra information to assess a claim. What appears to be simple may not always be. Medical information may be required from multiple medical professionals.
Financial information may also be required to determine if the insured has been working during the period, or when their last day of work was.
How the policy was obtained.: If the TPD policy is owned by a superannuation fund (specifically where the insurance was granted by the fund) then the superannuation fund needs to determine the insured’s eligibility to be able to claim and be a member of the fund. Superannuation funds often change insurers and determining the date of disablement determines which insurer is liable.
When a policy is owned under a superannuation fund arrangement the TPD policy needs to be approved by the insurer of the fund AND the trustee of the fund who are independent of the insurer. Whilst the trustee still has to assess the claim they have the benefit of receiving all of the information from the insurer.
The insurer: Not insurers are the same. Some insurers are better resourced and have more efficient processes. If they do not have the information they require they may not have the urgency to follow this up (which is where Claims Assistance helps). Some insurers also ask for additional
information which in reality will not help make a decision. Insurance companies do not have the luxury of knowing the insured – they merely see writing on a page.
The timeframe to complete a TPD claim is dependent on the illness or injury. It is most important to ensure that any claim is managed with respect to the information required and the information needed. This will ensure a decision is met within a timely manner.
25 Years Experience
98% Successs Rate
Page not found